European regulators are expected to provide emergency powers to national regulators to avoid naked credit- default swaps trades. These proposals are being considered by the European Union, dealing with problems after the Greek debt crisis.
It is expected that these measures will be temporary in nature and subject to approval by the relevant authorities. This was confirmed by the European Securities and Markets Authority.
It is also expected that the European Parliament will vote on restricting trade in credit-default swaps tomorrow. It was pointed that bans will only be considered in cases where there is a threat to the overall region.
French President, Nicolas Sarkozy and German Chancellor, Angela Merkel earlier wanted the European Union to fasten the process of avoiding financial speculation. They are in favor of these measures and feel that these speculations are against the interests of the whole European Union and threaten its economic well-being.
Germany also banned the practice of naked short selling last month. The crisis in the European region has sent Euro to a four year low against the US dollar. Apart from the problems in Greece, Spanish and Portuguese economies are also under severe pressure.
European Union is expected to accelerate the process of regulating credit-default swaps across the European Union.
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